Deer Valley Trucking, Inc. v. Lease One Corp. et al

Filing 22

MEMORANDUM DECISION AND ORDER denying 19 Defendant's Motion to Change Venue. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjm)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

DEER VALLEY TRUCKING INC., an
Idaho corporation

Case No. 4:12-cv-00604-BLW
MEMORANDUM DECISION
AND ORDER

Plaintiff,
v.
LEASE ONE CORPORATION, a
Massachusetts corporation; JOESHP L.
ANGELO; RICK LOPEZ; FIRST
FINANCIAL BROKERAGE, INC., a New
Jersey corporation; and ROBERT
SEARCY,
Defendants.

INTRODUCTION
The question before the Court is whether to transfer this case to the United States
District Court for the District of Massachusetts. Because a transfer would do little, if
anything, to lessen the costs associated with this litigation or serve “the interest of
justice,” 28 U.S.C. 1404(a), the Court will not upset Plaintiff’s choice of forums.

MEMORANDUM DECISION AND ORDER - 1

BACKGROUND1
Plaintiff Deer Valley Trucking Inc. is an Idaho corporation headquartered in Idaho
Falls. Deer Valley provides trucking and transportation services to oil companies. In
2011, Deer Valley was contacted by Joe Mardisch, a Utah-based broker associated with
Defendant Lease One Corporation. Mardisch began negotiating with Deer Valley over
the lease of 100 vacuum trailers, a specialized trailer used to transport oil.
After receiving Deer Valley’s initial financial disclosures, Mardisch turned over
negotiations to Lease One’s president, Defendant Joesph Angelo, and vice president,
defendant Rick Lopez, who worked in Lease One’s headquarters in Lynnfield,
Massachusetts. Lease One proposed to provide the $5,384,000.00 Deer Valley needed to
lease the vacuum trailers at a “promising interest rate.” Complaint, ¶ 38, Dkt. 1-1. In
addition to monthly payments, Deer Valley was required to provide a nonrefundable
down payment of $344,918.00.
The nonrefundable nature of the sizable down payment caused Deer Valley
consternation. To alleviate these concerns, Angelo and Lopez arranged for a conference
call with Deer Valley and Defendant Robert Searcy, president of Defendant First
Financial Brokerage, Inc., of New Jersey. Angelo assured Deer Valley that the down
payment was nonrefundable only in the event that Lease One provided the necessary
financing and Deer Valley did not go through with the deal. Searcy represented that First
Financial stood ready and willing to provide the money for the lease once the documents
1

Because the facts are largely undisputed at this point in the litigation, the Court accepts as true the facts
alleged in the complaint for the purposes of deciding this motion.

MEMORANDUM DECISION AND ORDER - 2

were in order. With these assurances in hand, Deer Valley signed the lease agreement
and wired the down payment to Lease One.
The lease agreement Deer Valley signed contains the following clause:
LAW: This lease shall be deemed fully executed and performed in the State
o[f] Massachusetts or in the home state of whoever holds the Lessor’s
interest as it may be assigned from time to time . . . . This lease shall be
governed by and construed in accordance with the laws of the State of
Massachusetts or the laws of the home state of Lessor’s assignee. [Deer
Valley] expressly and unconditionally consent[s] to the jurisdiction and
venue of any court in the State of Massachusetts and waive[s] the right to
trial by jury for any claim or action arising out of or relating to this
Agreement or the Equipment. Furthermore, [Deer Valley] waive[s] the
defense of Forum Non Conveniens.
Lease Agreement, dkt. 19-2, at 7.
Although the parties disagree as to why, Lease One did not provide the financing
to Deer Valley that it promised. As a result, Deer Valley brought suit against Lease One,
Angelo, Lopez, First Financial, and Searcy (collectively “Defendants”) in Idaho state
court. Deer Valley alleged causes of action for (1) racketeering, (2) common law fraud
and misrepresentation, (3) breach of contract, (4) breach of the covenant of good faith
and fair dealing, (5) unjust enrichment, (6) implied contract/quantum meruit, and (7)
conversion. Defendants removed the action to this Court and now seek to have the matter
transferred to the District of Massachusetts.
DISCUSSION
All the parties agree that the District of Massachusetts is an available alternate
venue for this litigation. As such, “[f]or the convenience of parties and witnesses, in the
interest of justice, a district court may transfer any civil action to any other district or

MEMORANDUM DECISION AND ORDER - 3

division where it might have been brought or to any district or division to which all
parties have consented.” 28 U.S.C. § 1404(a). Generally, “transfer under § 1404(a)
should not be freely granted” because “there is a strong ‘presumption in favor of [a]
plaintiff’s choice of forums.”2 Gherebi v. Bush, 352 F.3d 1278, 1303 (9th Cir. 2003)
(internal quotation marks omitted) vacated on other grounds by Bush v. Gherebi, 542
U.S. 952 (2004). “[Defendants] must make a strong showing of inconvenience to warrant
upsetting the plaintiff's choice . . . .” Decker Coal Co. v. Commonwealth Edison Co., 805
F.2d 834, 843 (9th Cir. 1986).
The Court’s decision to transfer a case is based upon “considerations of
convenience and fairness” in light of the circumstances of this particular case. Jones v.
GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000) (internal quotation mark
omitted). In making this determination, the Court may consider several private and
public factors:
(1) the location where the relevant agreements were negotiated and
executed, (2) the state that is most familiar with the governing law, (3) the
plaintiff’s choice of forum, (4) the respective parties’ contacts with the
forum, (5) the contacts relating to the plaintiff’s cause of action in the
chosen forum, (6) the differences in the costs of litigation in the two
forums, (7) the availability of compulsory process to compel attendance of
unwilling non-party witnesses, and (8) the ease of access to sources of
proof.

2

Defendants contest whether this presumption is as strong in this case. As will be discussed infra, the
Court disagrees with that contention. See Carijano v. Occidental Petroleum Corp, 643 F.3d 1216, 1222
(9th Cir. 2011) (accepting as true the facts in the complaint in a forum non conveniens analysis).

MEMORANDUM DECISION AND ORDER - 4

Id. at 498-99; see also Gherebi, 352 F.3d at 1302-03. Additionally, the presence of a
nonexclusive forum selection clause and the “relevant public policy of the forum state, if
any,” are significant factors in the Court’s analysis. Jones, 211 F.3d at 499.
1.

The Forum Selection & Governing Law Clause & Relevant Public Policy
Much of Defendants’ argument rests on the clause contained in the lease

agreement entitled “LAW.” Because the clause states that (1) lease was “fully executed
and performed in Massachusetts” and (2) “governed by and construed in accordance with
the laws of the State of Massachusetts,” Defendants’ argue the first, second, third, and
fifth factors all favor transferring this case to Massachusetts.
The sentence that governs the situs of the transaction is meant to tip the scales in a
venue contest, as Defendants’ reliance on it plainly shows. As such, it is fairly
characterized as a forum selection clause, and its presence ordinarily would weigh
heavily toward a transfer. However, its weight is significantly diminished in this case
because Idaho has “expresse[d] a strong public policy against the enforcement of [forum]
selection clauses.” Cerami-Kote, Inc. v. Energywave Corp., 773 P.2d 1143, 1146 (Idaho
1989) (interpreting a predecessor to Idaho Code § 29-110); see also Jones, 211 F.3d at
499 (affirming the denial of a motion to transfer in part because of “California’s strong
public policy to provide a protective local forum for local franchisees.”).
Moreover, the Court does not agree that the situs sentence and the governing law
sentence in the “LAW” clause support transferring this case under the second and fifth
factors. With respect to the governing law, Defendants are correct that Massachusetts

MEMORANDUM DECISION AND ORDER - 5

law controls the contract dispute in this case pursuant to the terms of the lease. However,
Deer Valley’s contract claim is but one of seven causes of action alleged, and the success
of the remaining claims is largely unrelated to the viability of the contract claim. See
generally Mannos v. Moss, 155 P.3d 1166 (Idaho 2007) (discussing common law fraud,
unjust enrichment, and racketeering); Nanney v. Linella, Inc., 943 P.2d 67, 71 (Idaho Ct.
App. 1997) (affirming summary judgment against a defendant on claims for breach of
contract and conversion). Thus, Idaho law controls the bulk of Deer Valley’s claims.
Nor does the Court agree that the actions underlying Deer Valley’s claims
occurred in Massachusetts, as Defendants argue. First, the situs sentence does little, if
anything, to inform where Defendants made the alleged fraudulent statements underlying
Deer Valley’s racketeering and fraud claims. These claims rest on Defendants’
statements made during the negotiations that allegedly induced Deer Valley to wire the
down payment. It is ambiguous whether these inducements fall within the terms of the
situs sentence.3 Consequently, the Court concludes that they do not. See Hunt Wesson
Foods, Inc. v. Supreme Oil Co., 817 F.2d 75, 78 (9th Cir. 1987) (“Another fundamental
rule of contract interpretation is that where language is ambiguous the court should
construe the language against the drafter of the contract.”). Furthermore, Deer Valley’s
claims are premised on Defendants’ alleged failure to perform under the lease. The situs
sentence is silent on that scenario.
3

Webster’s Third New International Dictionary defines “execute” as “to put into effect: carry out fully
and completely.” Id. at 794. Similarly, Black’s Law Dictionary (9th ed.) defines “execution” as
“Validation of a written instrument, such as a contract or will, by fulfilling the necessary legal
requirements <delivery of the goods completed the contract’s execution>.”

MEMORANDUM DECISION AND ORDER - 6

Second, Deer Valley has the better argument that Idaho has the stronger ties to the
events underlying Deer Valley’s claims, even if the alleged misrepresentations did
originate in Massachusetts or New Jersey. “Idaho has an ever-increasing interest in
protecting its residents from fraud committed on them from afar . . . .” Blimka v. My Web
Wholesaler, LLC, 152 P.3d 594, 599 (Idaho 2007). When a tortfeasor actively directs its
fraudulent statements toward an Idaho victim, as Defendants are alleged to have done
here, those acts place the tortfeasor in contact with Idaho. Id. at 598. Therefore, the
Court concludes that Defendants’ acts relating to Deer Valley’s causes of action favor
retaining venue in this district.
For the same reasons, the Court rejects Defendants’ argument that Deer Valley’s
choice of forum should not be given much weight because “Idaho lacks significant
contacts with the underlying causes of action.” Defs’ Opposition at 6, Dkt. 19-1. Thus,
the third factor counsels against transferring this action.
2.

The Balance of Hardships Between the Parties
Defendants argue that Massachusetts provides the more economical and

convenient forum for this litigation, primarily because the Defendants reside in
Massachusetts or within driving distance. The fact that Defendants outnumber Deer
Valley is an insufficient reason to transfer this case. See Gherebi, 352 F.3d at 1303
(stating that a transfer should be for the convenience of the parties, not simply one side of
the “v.”). Moreover, Mardisch is the only likely nonparty witness known to the Court at
this time, and neither forum could compel his attendance at trial from his residence in

MEMORANDUM DECISION AND ORDER - 7

Utah. See Fed. R. Civ. Pro. 45(b)(2). At best, the transfer would only shift the burdens
of litigation between the parties. But, “[s]ection 1404(a) provides for transfer to a more
convenient forum, ‘not to a forum likely to prove equally convenient or inconvenient.’”
Gherebi, 352 F.3d at 1303 (quoting Van Dusen v. Barrack, 376 U.S. 612, 646 (1964));
Decker Coal, 805 F.3d at 843 (transfer should not “merely shift rather than eliminate the
inconvenience”).
CONCLUSION
After balancing the relevant factors, the Court concludes that transferring this case
to Massachusetts would achieve little, if anything, to reduce the costs or burdens
associated with this litigation and that several important policy factors support retaining
venue in this district. Therefore, the Court denies Defendants’ motion to transfer.
ORDER
IT IS ORDERED THAT Defendant’s Motion to Transfer Venue (Dkt. 19) is
DENIED.

DATED: August 16, 2013

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

MEMORANDUM DECISION AND ORDER - 8